Retailers still smiling

Press, 9 March 1987, Page 13

Retailers still smiling

Retailers over all still have moderate optimism, according to the latest business opinion survey by the National Bank. More retailers surveyed expected sales to grow faster than inflation than the reverse. The results were much the same as in the December survey, but there was some weakening in the expectation of how strong the growth would be, and among the pessimists some strengthening of beliefs of how much sales would weaken. On balance, retailers surveyed expect to reduce their stocks over the next few months, but not dramatically. “There was no evidence from either our questions on stocks or orders that the level of current sales is any worse than most had expected,” the bank reports. •

The majority of manufacturers surveyed reported sales in recent months were ahead of

those a year ago. The proportion expecting sales to outpace inflation was virtually the same as in the December, survey: 48 per cent. However, of the 28 per cent expecting them to lag, half thought the sales outlook was particularly poor.

Business conditions in transport were reasonably favourable over the last

few months, the bank reports.

Fifty per cent reported increased work and 50 per cent (but not the same respondents) expected further strengthening of business conditions.

Some respondents plan to increase their trucking fleets in 1987, a feature lacking in the bank’s surveys in 1986.

In comment, the bank criticises the notion that monetary conditions became too loose in mid-1986.

A tighter monetary policy would have been ineffective against three “critical and largely unique" elements in mid-1986, the bank says. These were:

• A high wage round lifted disposable incomes of wage and salary earners substantially for the first time in several years.

• A substantial income tax had been promised from October 1.

• A guaranteed 10 per cent price rise across a wide range of goods was about to occur overnight